The Federal Government has said that the emergence of the deadly coronation in Nigeria has called for a review of the 2020 budget in other to get adequate funding,
Mrs Zainab Ahmed, the Minister of Finance, Budget and National Planning stated this on Wednesday while addressing State House Correspondents on the outcome of the week’s Federal Executive Council (FEC) meeting.
She said the Council also gave an approval of the revised sum of $2.5billion for the Ajaokuta-Kaduna-Kano Gas pipeline project.
On the COVID-19 effect in Nigeria, the Minister said the government had also been concerned about the effect it would have on the 2020, noting that though there was plan for midterm, adding that should the review indicate a significant impact on plans, a revision of the annual budget would be needed.
According to the Minister, the $53 per barrel that the crude currently sells has fallen below the budget’s benchmark, she, however, noted that the some days when the crude production went beyond the 2 million projected to 2.1 million had provided a bit of cushion for the shock of the COVID-19.
“We are concerned because it does have an impact on revenue and at the current crude oil price of $53 per barrel is below the budget benchmark. What we are doing is that we are studying the situation and when the budget was passed we committed to do a midterm review.
“We will do the midterm review and if the revenues are so significantly affected, we will have to do some revisions in the budget by way of budget adjustment.
“I will want to inform that the crude production is now at 2 million barrels per day and in some days it has moved up to 2.1 million barrels per day so that in itself will be a cushion.
“All the same we are not taking any measures now until we have a reasonable period we make a review and then we may need to make an adjustment of budget through working together with the National Assembly”, she said.
On the Ajaokuta- Kaduna- Kano has pipeline project, the Minister said her Ministry jointly made a presentation with the Nigerian National Petroleum Corporation (NNPC) to the Council for the $2.59 billion contract with a Chinese company.
She said the contract that has been approved today is an EPC lump sum contract with the NNPC required to pay 15 per cent of the contract amount while the 85 per cent would be provided by Sinosure of China in the form of a loan facility with a sovereign guarantee.
“The memorandum was seeking council’s approval for the issuance of a sovereign guarantee to the tune of 85 per cent of the Engineering Procurement and Construction (EPC) contract for the Ajaokuta-Kaduna-Kano project which we call AKK.
“This is not a new contract, it was previously approved by council in 2017 in the sum of $2.89 billion. The memo of today is at a revised cost of $2.571 billion equivalent to a 10 per cent discount of the original sum.
“The previous contract was a contractor financing model, the contract that has been approved today is an EPC lump sum contract with the NNPC required to pay 15 per cent of the contract amount while the 85 per cent will be provided by Cynosure of China in the form of loan facility with a sovereign guarantee.
“This is a facility that has an interest rate of Nibor plus 3.7 per cent with a 12 year repayment period and three years moratorium period. We have done an extensive review of this project and we are satisfied that the cash flows from the Ajaokuta-Kaduna-Kano gas pipeline project is sufficient to pay the facility itself.
“This project is one of the cardinal policies of this administration and it is very strategic to national development.
It has a lot of positive impact that we anticipate would be met. It will spur industrialization and industrial growth as gas-based industries and power generating companies be the key beneficiaries.
“It will also create employment opportunities, increase government revenue, encourage export and enhance the nation’s foreign reserves by reducing dependence on import, it will be environmentally friendly as it will eliminate gas flaring.
“It will also improve the health of the communities of the oil-producing areas where gas flaring currently takes place.
It will also reduce the carbon footprint and comply with the climate control treaties that Nigeria has committed to”, she explained.
Meanwhile, the Minister of Health, Prof Osagie Ehanire, reassured Nigerians of the preparedness of all health facilities in the country to provide care and prevent the spread of COVID-19 beyond the index case of the Italian who was discovered in Lagos last week.
Ehanire stated that so far, the government had released a total of N935million to the Nigerian Centre for Disease Control to procure all the medical supplies it would need to make adequate preparations for the infection.
On his part, the Minister of Science and Technology, Dr Ogbonanya Onu, disclosed that the US was currently conducting tests on a ‘chemical compound’ isolated by a former Chairman of the Independent National Electoral Commission, Prof Maurice Iwu, as a possible cure for Covid -19.
He dismissed reports suggesting that Iwu had found a cure for Covid -19, adding that Iwu’s initial finding was that the compound could cure SARS, a strain of Covid -19.
Onu said the US showed interest in the claims and had taken the compound for testing.
“They are testing it in the US to confirm whether this could be a cure for Covid -19 or SARS”, the minister added.
Also briefing, the Minister of Aviation, Hadi Sirika said the FEC approved the procurement of bird deterrent/ resistance equipment for the Kano, Enugu and Port Harcourt airports.
According to him the procurement of bird deterrent equipment is for safe operation at the three airport approved at the cost N538.1 million.
Minister of State for Works and Housing, Abubakar Aliyu, also briefing, said the Federal Executive Council FEC approved N6.6 billion for the rehabilitation of the 1.76km Muritala Mohammed in Lokoja, Kogi State to rehabilitate the dual carriageway and bridge protection works.
